Pol Watchers

Beshear appoints Sen. Scorsone to judgeship

FRANKFORT -- Gov. Steve Beshear appointed state Sen. Ernesto Scorsone, D-Lexington, Thursday to be a circuit judge in Fayette County.

Scorsone said he was honored by the appointment.

"Lexington has a strong tradition of an excellent bench and I hope to continue that," he said.

Scorsone, a Lexington attorney,  will serve until the Nov. 4 general election to replace Sheila Isaac, who stepped down to enter the senior judge program.

Scorsone, 56, is the only person thus far to file papers to run in November for the circuit court seat. The deadline to file is Aug. 12.

Scorsone, who served 12 years in the state House and 12 years in the state Senate, recently withdrew his name to run again in November for the Senate. He had no opposition.

Scorsone backed Beshear for governor last year and served on Beshear's transition team.

--Jack Brammer

Political morsels from the 128th annual Fancy Farm weekend

The most subtle political comment of the weekend came from state Senate Education Chairman Ken Winters, a Murray Republican.

Winters is facing a stiff challenge from former U.S. Rep. Carroll Hubbard, D-Mayfield, for the 1st District Senate seat that covers seven counties in far Western Kentucky.

Winters, during a speech at a Republican rally, said if voters want to check his record, they can look at Google on the Internet. “If you want to check my opponent’s record, that’s on Google, too,” Winters added.

The Hubbard record he apparently was referring to was Hubbard’s guilty plea in 1994 to three felony charges related to federal campaign spending laws.

“I don’t need to talk about that,” Winters said later to reporters. “I think my message gets through by the subtlety.”

Hubbard has said he has done his best to overcome past mistakes and is trying to do what he can to help Western Kentucky.

Of Winters, Hubbard said Saturday at the Graves County Democratic Breakfast at Mayfield High School that his opponent is 74 and he is 71. “I’d better not make age an issue in this race,” Hubbard said.

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The most melodic political comment came from Gov. Steve Beshear.

Not since the late Gov. A.B. “Happy” Chandler has a Kentucky governor entertained a crowd with such wistful warbling.

Beshear was lavished with loud applause at the Democratic breakfast for his harmony on “My Old Kentucky Home.”

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The most political opening salvo from the picnic's speakers came from Democratic Gov. Steve Beshear.

As Beshear started speaking, he was roundly booed and heckled by a large contingent of Republican supporters in the audience.

He said he was glad they had "funeral home fans" on the extremely hot day because on Nov. 4, Election Day, "we will bury their candidates."

Beshear added that he was glad Republican U.S. Sen. Jim Bunning was at the picnic.

Bunning said a few years ago he would not return to Fancy Farm because he was mistreated.

Beshear said he"may have had something to do" with Bunning's return to the political picnic.

"I called out the National Guard to protect him," Beshear said.

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Heard at Fancy Farm

As the first politician to take the podium at the Fancy Farm Picnic in Western Kentucky, Democratic Gov. Steve Beshear kicked of the day with fighting words for Republicans backing U.S. Senate Minority Leader Mitch McConnell.

"They're going to a funeral on Nov. 4th when we bury their candidate," Beshear said.

McConnell's Democratic challenger, Bruce Lunsford, stepped to the podium next after losing a coin toss with McConnell.

"It was interesting that Sen. McConnell chose to go second, because that's where he's going to end up on Nov. 4th," Lunsford said.

During much of Lunsford's speech, which focused heavily on energy issues and McConnell's status as a Washington insider after 24 years in office, Republicans chanted "boring" and "two-time loser," referring to Lunsford's two failed runs for governor.

As he closed, Lunsford said "it's time to stick those hound dogs on Mitch McConnell," a reference to memorable ads featuring hound dogs that McConnell used in his first run for U.S. Senate 24 years ago.

McConnell spent his time talking almost exclusively about energy issues. He lambasted Democratic presidential nominee Barack Obama repeatedly and tied himself to Republican presidential nominee John McCain.

"John McCain and Mitch McConnell say 'yes we can,'" McConnell said.

Neither candidate had a memorable line.

Next up was Republican U.S. Sen. Jim Bunning, who continued criticizing Democrats on energy issues.

"Thanks Bruce. You'd rather get your oil from the Middle East than from middle America," Bunning said as men dressed in traditional Arab garb cheered in the crowd.

He went on to criticize Lunsford for lobbying nearly 30 years ago when he was an aide in state government for an automatic state gas tax increase that rises with the price of wholesale gas. Lunsford mentioned his role in creating the tax in a video earlier this year.

"Thanks Bruce. Thanks for showing your true liberal colors in this campaign," Bunning said.

- John Stamper

Fancy Farm food ... mmmmmm

If you couldn't make it to Fancy Farm, click here to view KET's live webcast of the political speaking at 2 p.m. CT.

CLICK HERE to see an audio slide show by Herald-Leader columnist Tom Eblen about how members of St. Jerome Catholic Church in the Graves County community of Fancy Farm prepare their annual picnic, which will attract more than 10,000 people Saturday. The show is narrated by Eddie Carrico, above left, of Fancy Farm.

Tom has lots more about Fancy Farm on his blog, The Bluegrass and Beyond.

- John Stamper

Grayson in line to head national organization

Kentucky Secretary of State Trey Grayson was elected Monday by his national colleagues to be president-elect of the National Association of Secretaries of State and will assume the presidency of the group next summer.

The group, meeting in Grand Rapids, Mich., represents state officials charged with overseeing elections and business services.

When he assumes his post next year, Grayson, a Republican, will be the first secretary of state from Kentucky to be the national organization's president in its 105-year history.

--Jack Brammer

Bunning pessimistic on Holsinger nomination

By Halimah Abdullah
HABDULLAH@MCCLATCHYDC.COM

WASHINGTON -- Sen. Jim Bunning, one of Dr. James W. Holsinger Jr.'s staunchest supporters in his bid to become U.S. surgeon general, suggested Tuesday that the physician's quest for the nation's top medical post is at an end.

During a telephone press conference Tuesday, Bunning said he doubts Holsinger's nomination will move forward. Bunning cited the blocking of several Bush administration-backed judicial appointments by the Democratic leadership -- a move that has rankled both of Kentucky's senators.

"I gauge it from the handling of other nominations for other positions by the majority party in the U.S. Senate," Bunning said of Holsinger's chances. "They are not moving any positions of consequence. And Dr. Holsinger's is an important position and therefore I suspect that they won't be moving it. Pretty much anyone with controversy is not going to be considered."

Holsinger did not return calls for comment.

Meanwhile, both the White House and Senate Minority Leader Mitch McConnell said Holsinger's nomination is still alive.

"Senator McConnell continues to believe that Dr. Holsinger is a proven leader who has dedicated his career to improving health education and services in Kentucky and across the nation and that he is an excellent choice for surgeon general," said McConnell spokesman, Robert Steurer.

Holsinger served as Gov. Ernie Fletcher's secretary for health and family services from 2003 through 2005, was a professor and chancellor of the University of Kentucky's medical center for nine years in addition to other academic and administrative medical school posts across the country, and served for 26 years in the Department of Veterans Affairs. He also served for more than 30 years in the U.S. Army Reserve.

He has a master's degree in biblical studies from Asbury Theological Seminary in Wilmore. He obtained his medical degree in 1964 and a doctorate in anatomy in 1968, both from Duke University.

"Dr. Holsinger is a highly respected, well-qualified physician and educator whose nomination has now been pending for nearly 400 days in the Senate," said White House spokesman Blair Jones. "He will make an outstanding surgeon general and we call on the Senate for an up-or-down vote on his nomination."

From the moment his name emerged as a potential U.S. surgeon general, Holsinger's nomination was rife with controversy. Last year, Holsinger faced a firestorm of criticism from gay rights groups, the National Organization for Women, the American Public Health Association and some public health experts for a Methodist church paper he wrote in 1991 titled "Pathophysiology of Male Homosexuality," which described same-sex intercourse as incompatible with Christian teaching.

Holsinger distanced himself from the paper during a July Senate hearing, saying the comments don't reflect his current views. However, Senate Democrats refused to move forward with a confirmation until Holsinger completed written responses to questions posed by members of the Senate Health, Education, Labor and Pensions Committee. Democrats stayed in session over December's holiday break to prevent President Bush from naming the physician to the post in a recess appointment.

Dr. Steven Galson, a rear admiral in the U.S. Public Health Service, was named acting surgeon general last fall.

The surgeon general's post has been highly politicized in recent years. Days before Holsinger's committee hearing, a former surgeon general, Dr. Richard Carmona, testified before the House Committee on Oversight and Government Reform that the White House prevented him from speaking publicly about stem-cell research and sex education, among other health topics.

Bank with ties to Jones rapped for insider loans

By John Cheves
JCHEVES@HERALD-LEADER.COM

Former Gov. Brereton Jones has borrowed heavily from a financially distressed bank that he and several other Democratic Party leaders founded in 2001, according to interviews and bank records.

Federal regulators have criticized the directors of Frankfort-based American Founders Bank, including Jones, for inadequate supervision. The bank was badly managed and suffered "hazardous lending and lax collection practices," which left it with far too many unpaid loans, according to the Federal Deposit Insurance Corp.

Among the specific concerns cited was improper reporting and recordkeeping of insider loans to bank directors and executives.

The FDIC issued a cease-and-desist order to the bank eight months ago to warn it about potential insolvency and try to avoid a taxpayer bailout.

Jones, 68, owner of Airdrie Stud horse farm in Woodford County, is the only insider to borrow enough money that the bank is required by law to identify him, which it did at the Herald-Leader's request. Generally, that threshold is $500,000 or five percent of the bank's capital, whichever is less.

Jones would not say how much of the $11 million in insider loans was his. He said he used the loans to refinance, at a lower interest rate, his 2003 purchase of historic, 495-acre Woodburn Stud farm on Old Frankfort Pike, which originally listed for $7.4 million. According to land records, last July Jones also took $16 million in mortgages on his farm properties from Louisville-based PBI Bank in exchange for various loans and a line of credit.

The former governor, who served from 1991 to 1995, said he is repaying his loans on time and has not contributed to the bank's problems.

Jones said his farms rely on a steady supply of credit, but his assets outweigh his liabilities by $4-to-$1.

"There is no financial difficulty here," Jones said.

"This is a loan (at American Founders) that any bank would be willing to take," he said. "The public can be guaranteed that there's nothing that's improper going on relative to my financing."

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Branscum steps down from hotel board; gets contract to build hotel

By Linda B. Blackford
LBLACKFORD@HERALD-LEADER.COM

When the Bluegrass Equine and Tourism Foundation was formed in March 2007 to build a hotel at the Kentucky Horse Park, one of its members was Steve Branscum, one of then-Gov. Ernie Fletcher's closest friends and political allies.

The Russell Springs construction magnate is no longer on that board. But Branscum's company is one of two signed on to build the hotel. Construction costs for the $90 million project are expected to be about $51 million. Branscum stepped down from the foundation board at the suggestion of the Internal Revenue Service, according to the man who put the hotel deal together.

"The IRS didn't say it was a conflict," said Brad Burgess of the Thayer Group, which is heading up the hotel development with Cincinnati-based Boorn Partners. "They suggested that we reduce the number of people on the board."

Branscum had been part of a previous group that wanted to bid on the project, so it was easy to include him, Burgess said Wednesday. "We chose Mr. Branscum because he had been on a team trying to put a deal together that didn't work," Burgess said. "I was new to Kentucky; I didn't know he was politically connected to the former governor."

Branscum did not return calls for comment.

On Tuesday, a legislative panel approved $118 million in tax-exempt state bonds to finance the hotel deal, but only after sharp questions about the project's scope and financing. More details are now emerging about the complex proposal, including that it appears to be the first time such an arrangement -- with a non-profit foundation overseeing a private development with public bond money -- has been used.

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Versailles drops bid for Frankfort properties

A controversial land deal involving the city of Versailles and nine office buildings in Frankfort is dead, Versailles city officials announced on Thursday.

The Versailles City Council last month rushed approval of a plan to issue $56.5 million in 30-year bonds toward the purchase of the office buildings, which are owned or co-owned by Rodney Ratliff, a politically active Frankfort landowner.

The buildings are leased by Kentucky state government and used by various agencies.

H&W Development LLC of Georgia wanted to buy the buildings, with the financing to come from Versailles' tax-exempt, low-interest bonds, and a big team of lawyers and bankers from around the country aggressively pushed the deal. In the end, Versailles would own the buildings, but it wouldn't face any risk because European bank Dexia would issue a letter of credit guaranteeing payment on the bonds, H&W said.

However, a story in Friday's Herald-Leader raised questions about the deal among residents of Versailles.

The attorney general's office this week announced that it was opening a review of the deal. Subsequently, Dexia got cold feet and withdrew, causing the deal to collapse.

Versailles Mayor Fred Siegelman on Thursday said he was counting on the deal to provide $1.5 million toward the cost of a new police station.

"I'm very disappointed," Siegelman said. "The issue got confusing and taken away by people who just didn't understand it."

In New York, Dexia Credit Local Vice President Richard Skiera declined to comment.

For more on the story, see Friday's Herald-Leader.

-- John Cheves

Ex-first couple share reunion moment at rally

Former Gov. John Y. Brown introduced his ex-wife at a rally sponsored by the Alzheimer’s Association as one of Kentucky’s greatest first ladies, the mother of his children and “one of the greatest wives a fellow ever had.” “Welcome back to Kentucky, Phyllis,” Brown said, as the crowd laughed.

Phyllis George, whose mother died of Alzheimer’s, is a former Miss America and advocates on behalf of those who suffer from the disease. She recently moved to Lexington.

The introduction was impromptu. The event’s M.C. saw Brown in the crowd and called him forward to introduce his former wife. As he came to the microphone, George spoke to him. “I’m still telling him what to do,” she said to those nearby.

After the introduction, George thanked her ex-husband. “John, you still haven’t lost it,” she said. “That was like old times.”

She turned to the crowd of just over 100 who had gathered in the Capitol Rotunda. “He’s never been so nice to me,” she said. The crowd laughed again, this time nervously. “I’m kidding,” she said. “We’re friends.”

- Sarah Vos